By Erwin Seba
HOUSTON (Reuters) -Oil prices were largely steady on Thursday, paring losses of more than 1% earlier in the session, as a potential peace deal between Russia and Ukraine continued to exert downward pressure, but expectations about a pause in new U.S. tariffs fueled optimism.
Brent crude futures were down 17 cents, or 0.2%, at $75.01 a barrel by 11:15 a.m. CST (1715 GMT), while U.S. West Texas Intermediate crude (WTI) was down 1 cent, or 0.1%, to $71.38.
U.S. President Donald Trump said in a social media post that he planned to announce reciprocal tariffs on Thursday, which could take aim at every country that charges duties on U.S. imports.
Market participants said, however, they understood a pause on implementation of the tariffs would allow negotiations until the second quarter.
“We saw a big recovery in prices on tariffs not going into effect until April,” said Phil Flynn, senior analyst with Price Futures Group. “That will allow time for negotiation.”
Brent and WTI lost more than 2% on Wednesday after Trump said Russian President Vladimir Putin and Ukrainian President Volodymyr Zelenskiy expressed a desire for peace in separate phone calls with him and Trump ordered U.S. officials to begin talks on ending the war in Ukraine.
The oil price decline over the past 24 hours looks to be driven by a change from supply concerns to sufficient supply, said UBS analyst Giovanni Staunovo, adding that some market participants expect an increase in Russian energy exports.
Russian oil exports could be sustained if workarounds to the latest U.S. sanctions package are found, after Russian crude production rose slightly last month, the International Energy Agency (IEA) said in its latest oil market report.
The Ukraine news and Wednesday’s U.S. oil inventories data offset higher U.S. inflation numbers that could drive the Federal Reserve to take a cautious approach to interest rate cuts in 2025, said PVM analyst John Evans.
Russia is the world’s third-largest oil producer and sanctions imposed on its crude exports after its invasion of Ukraine nearly three years ago have supported higher prices.
ANZ analysts said on Thursday that oil prices declined on news of the potential peace talks because of “optimism that risks to crude oil supplies would ease”, pointing to the U.S. and EU sanctions.
A build in crude oil inventories in the United States, the world’s biggest crude consumer, also weighed on the market. U.S. crude stocks rose more than expected last week, data from the Energy Information Administration (EIA) showed on Wednesday.
(Reporting by Erwin Seba, Enes Tunagur, Anna Hirtenstein, Emily Chow Editing by David Goodman, Kirsten Donovan and Marguerita Choy)
